Tokyo - The dollar faced further selling pressure in Asia on Wednesday as investors fret about an impasse over the US budget that could lead to a shutdown of parts of the economy.
The greenback fetched 98.63 yen in Tokyo midday trade, from 98.74 yen late in New York and well down from the levels above 99 yen seen on Monday.
The euro also slipped to 132.86 yen from 133.00 yen while it was nearly flat on the dollar at $1.3470 from $1.3469.
US lawmakers are approaching a Monday night deadline to find a deal on a new budget. If no agreement is reached some government agencies could be forced to shut down, which could deal a major blow to the US economic recovery.
“Fiscal D-day is looming, spooking investors,” National Australia Bank said.
Traders began moving out of the greenback last week after the US Federal Reserve surprised markets by keeping its $85-billion-a-month bond-buying stimulus programme intact.
“Players who had expected the dollar's upturn on a change in the US monetary policy are now forced to review their strategies,” a senior trader at a Japanese bank told Dow Jones Newswires.
Japanese exporters are also selling dollars and euros as they look to lock in profits before the end of the month, dealers said.
The euro found a measure of support from a modest gain in the closely watched IFO German business confidence index for September, which represented the fifth consecutive monthly rise.
However, the single currency is down from multi-month highs on Monday after European Central Bank chief Mario Draghi voiced concern about liquidity in the eurozone banking system. - AFP